9 Benefits of the Performance Appraisal

From the beginning and through the career, you need to know how good you are in terms of particular fields of activity. It is difficult to give yourself an objective evaluation. Performance appraisal system is a useful management tool which helps to gain feedback, review and estimate whether the performance is effective and discuss what needs to be done for it to become so. Managers perform evaluations to benefit both employees and the employer. The most significant benefit of the appraisal system for the manager or the head of department is that it provides a document of employee performance over a specific period. Here is a list of the benefits of the performance appraisal system:

  1. Every employee’s individual performance influences how all the team or even the firm (especially if it is small) is doing.
  2. It clarifies the employee’s role and status in the organization. Some workers like to know where they stand regarding their job performance and want to see what else (useful) they can do for the company.
  3. Self-development is the most important benefit for the employee. Performance appraisal allows you to provide positive feedback as well as identifying areas for improvement. An employee can discuss and even create a developmental (training) plan with the manager so he can improve his skills.
  4. It motivates employees if supported by a good merit-based compensation system. Best performers get better pay and benefits packages. Similarly, those employees that lag behind get penalized.
  5. It provides a structured process for an employee to approach the management for discussions, identify problems, clarify expectations and plan for the future. It lets both manager and employee set up long- and short-term goals.

  1. The statistics can be used to monitor the success of the organization’s recruitment and induction practices.
  2. Performance appraisal system also helps the management in deciding about the promotions, transfers and rewards of the employee.
  3. It is easy to identify the under-performers and decide whether you want to keep them hoping for improvement or sometimes have to let them go.
  4. Both manager and employee, keep performance appraisal records and can retrospectively review the changes in the performance in future.

If you use the performance appraisal system correctly and smartly, the results won’t leave you indifferent. Undoubtedly, there are disadvantages in the performance appraisal system as nothing is ideal, but it provides a lot of useful information for the company and employee itself that can’t be acquired from other sources. Furthermore, years of experience show the efficiency of using performance appraisal system in practice.